SG SUPPORT SERVICE LTD

Executive Summary

SG Support Service Ltd shows early-stage operational activity with limited financial history. The company’s latest accounts reveal a weakening financial position with negative working capital driven by director loans and dividend payments exceeding earnings. Conditional credit approval is recommended, subject to assurances on liquidity support and improved working capital management.

SG SUPPORT SERVICE LTD - Analysis Report

Company Number: 14762121

Analysis Date: 2025-07-19 12:13 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   SG Support Service Ltd is a recently incorporated private limited company, with only two years of financial data available. The latest accounts show a significant deterioration in working capital, moving from a net current asset position of £22,706 in 2024 to a net current liability of £143 in 2025. The heavy increase in current liabilities is largely due to a significant balance in directors’ current accounts (£38,449), which suggests reliance on director funding to meet short-term obligations. While the company remains active, the limited scale, negative working capital, and reliance on director loans increase credit risk. Approval could be considered if the director provides assurance on the continuation of support or plans to improve liquidity and reduce short-term liabilities.

2. Financial Strength:
   The balance sheet reveals minimal fixed assets (£189 net book value) and fluctuating net assets, which declined sharply from £23,085 in 2024 to £46 in 2025. Shareholders’ funds mirror this decline, indicating that retained earnings have been depleted, likely due to dividends paid (£38,300 in 2025), which exceed profits. The company’s capital structure is weak, with very limited equity buffer against liabilities. The absence of long-term debt is positive, but the high current liabilities and director loans pose a risk to financial stability.

3. Cash Flow Assessment:
   Cash holdings increased from £30,028 to £37,411, which is a positive sign; however, this is offset by the large increase in current liabilities, especially the director’s current account, indicating internal borrowing rather than external financing or operational cash generation. Debtors have increased moderately, but the net working capital is negative, pointing to potential liquidity strain. The company’s ability to meet short-term obligations without further director funding or external finance is questionable. Monitoring cash flow generation from operations and timely collection of receivables is critical.

4. Monitoring Points:

• Track changes in directors’ current account balances and confirm if these are repayable or convertible to equity.
• Monitor working capital trends and the company’s ability to reduce current liabilities.
• Review dividend policy to ensure it does not impair liquidity and capital.
• Watch cash flow from operations and debtor collection periods to assess liquidity improvements.
• Verify ongoing compliance with filing deadlines and operational status to avoid regulatory risks.